OFFICE OFTHEATTORNEY GENERAL OF-I-TEXAS
AUSTIN
?al1tt3r
%x3. c. ‘
..
V:oodward
ChQ2rxnan
2onrd
of c\
Insuroltco
AU8tAl, Teras
C0mi8:sicners
‘.~
Dear Sir:
Xon. Kalter C. V:ooCtmrd,
EEoy.~18,
1939, rage 2
of the stcckholdornITouldcur,lifyin pny-
zl.ont
or tk? cqital atock.
"In order to coz,$ctc our file on
1 Attorney Conoral opinionzz,
will you pleaoe
rovim tho opinion of AgAl LE.,1938, snd
iI you find thatIt~rsci.toaon izgroper
oonstructionof 'thti:Lzui,~.~~~leese,
0fri0i5iiy
8dViti;c
IX!."
7he 0pinion:or tt&".hopEtrtxent
written by
VI-. ElcliirdBroola, X,-r
7 il~:22,~.:1930,
to your l%ym%mmt
upon the mm quostion,ua8..,to
the effect that notes se-
owed by roul ostatc where thoholders thereof wore
:poyora oould not be used:inJwQ?mnt of capitol stock
.of m inswanoe aonpmy,' ~'
Artiolo 4717~,:f&&x&Civil Statutas of Coxan,
1923, cot& forth the roquirments of~o charter for a life,
ho<h and occident insurance compeny end providen in
pxragmph (5) thereof thiat~tha.chn;-ter shall sot forth
"the iz:ountof .its capital stock, not less than one hun-
droa t.l;ousmddollars, cl1 of which cepital steak must be
suSscribed'a;lil
rully pnid up anU in the hands of the in-
coqorntors before soid articles of incorporationaro.
PilUd."
Article 4752, TiavisGdGivil Statutco of TCXCS
~192.3,
provides for the cxation of 8 limited stock cm-
pcy in accordancenith the provisions ol Article Z&717,
A o snd privileges and provides
cu:)rn,with limitad rig?t
for a.:?iniuun"actual pnid up czipitalof twenty-five
tlsxmancidol15r3."
non. Walter C..Y?oadmixdr
ticy10, 1933, ToGo 3
htscla 4705, Xevlsed Civil ZX;t;tutoa
of Texas
1923, enmerates certoln items of xhich the capital
stook of en Incuronce coqmny nay consist and Section
3 thereof roods:
"in first aosL~tr~,cs
upon mimwberod
ma1 eotnto IE this nttrta,the title to which
Is valid, end tbo zort~it~o%aluo of which is ~~
'double the mount lomsd thereon, exclusive
of buildings, uzlesn~suchbuildings ere insur-
ed in nom reSp0nsihlo co32pnilyend the poliay
or policias.transfe;rred:~othe.aorzpanyteking
suah mort@~gc.*,:~,.,j.'
':
: It Gas hold bF the Supike Court of Tn&s in
the oase'oi ConorfilE?arklrw~
(1:
C-nsueltg
'Ensurunco Conpimy
et 01 vo.'?-'noaley
ot al, 222 S!TQiIl~thztn note of a
subccriboc? to ccpital~stockin er.izmurmcc company
secixrcb by e uelid fLrsC.r.ic,Yqsc,e
on reel estate to v:b.ich
tha subscriber has title, ~tccc$e$.by t!:ecorpor&tion in
>aynant for the,stook;~4-c
_..'*poyxqf ~&AKLlly rcX?oived"
tiithinthe mmnlng of~~Lrtic&~ 22, &XtiOE a of the Con-
stitution and thnrefo:e UaJ.+ ...m: ..
~.~
Chief 47ustS.&k$&.s~ spo?ci~g~in the above
case soid: : ',:~ 'i,: :'~
"1%subsc@b&s note~&curcd by tlvalid.
first I!?oxt:~alp? real
U~;OIl tiststo,occqknd by
the corporation In Fnyneiltof o'took,cmnot
1X3held as other IA-m praA70rtyin tha full
nenoe or the Ccm3titutio:i. T>.ecorporation
thorehy bbtaina somthing X?Gx@t&m tf1ez~ere
+~roxise of the oubncrlberto i;oy. it obtoi;ls
the right to hove bhe lnnd r@?,ro:jr,riatcdto
the peylcont.
of t.henote. ?'bisis 0 vdu~hle
right, a property rIg?.t,9~ fully so cs cny
contract right, end, in gc-norrtl, ~13voluubla
ns my such right. The coxporst;ion rocoived
it rind'
cwns it. 1% ccx5ti.tut.c: e d.istisct
ascot in its hondr;;rccognizod, :;cnrmlly,
~,s..q~o
of tht,nest ~~t,eble, dcsiroblo and
e~nlly '&r&rtible fdrrin of property.“
‘--.
.‘I,.. -
. ‘2,
Ken. r;nltorC. VJoodww.1,
j'li:r
10, 1939, rage 4
of the CoevxisslonIn tf:i.t
Ou!;eof i'rudantialLiie Insur-
anaa Cozrpny of Taxctnvs. f'elcxon,222 P.7967.
Fe cioh to rx~rticularly call your attention
tc the fact.that In the cane3 of 'Lashervs. .Smyor(Tex.
Sup, Ct.) 25i 3-g905 en?.Sxipcion vs. Tlrnt State Fank
of &arlllo (Tax.'Sup. Ct.) 211 SiY977;aitcd by ?.Yr. .~,,
Brook8 In hia oplnion'or&!ril.'Z?;1938,.thc notoe in "
questionwxe unsecured~cin d tix couz$ rightfullyhold .~ ~
them to be %ere promlsos,to spay"and not property with- '~.
in the msaninn of the:Coxstitution,Article 12, Section
6, The oase of General Eonding & Cnnusltg Insuranca :
coIqmly vs. Ko5clay (Tt?x.~.civ..Ap~i)174 sr:1031, 'also 'I:
cited by F!riBrooks,.wassrproaslgoverruled by the
Supreme'Court 'in222 3%'901,:above referred to. ,'
It la, the&ore;'th;c oninion of this Dc~art- ',
mentand you are so edvj.r.cr!~that
the pngncnt or capital
stock.of an Insurance eorcI,nny
w1thzotcr secured by first
mort&ages on unincumhcix~real estate in Texas in valid,
aonditlonedupon wstri~t cxnn~lianco v:ithall the provi-
sio'nocontained in'Artj.cle Vieemressly
45X3, ,ceuj?ra.
ovcrrule~theopinion.of tlZs l:o~artncnt, dated .April
22; 19W by,,Xr.*o&s,. to ye- contrary.
~*ustlng,that tki&:aotisfactorilyanswers your
inquiry, we'are 'v
IA:A!i